MEMX Comments on Anticompetitive Closing Auction Fee Increase
Today, we submitted a comment letter on a NYSE proposal to increase the fees that they charge to members that trade in their closing auction using Market on Close (“MOC”) orders, while offering “discounts” to those higher fees to firms that divert substantial order flow to NYSE during intraday continuous trading.
MEMX was founded to increase competition among exchanges as robust competition is a necessary ingredient for a healthy market. Unfortunately, NYSE’s proposal would leverage the virtual monopoly that it has on executions at the official closing price to: (1) increase costs for broker-dealers and investors, and (2) undermine otherwise fierce competition for order flow in the continuous market.
At the end of the day, no market participant should be forced to choose between paying reasonable fees for their closing activity or directing their intraday orders to the best available market. In fact, all exchanges have a statutory obligation to offer their services at prices that are “fair and reasonable” and that permit robust competition. The proposed MOC fees are ultimately inconsistent with those standards.